Final Thoughts

John Packard is traveling…

Here’s what readers of Steel Market Update have learned this week. Steel prices continue to slide. By Steel Market Update’s calculation, the benchmark price for hot rolled steel now averages $515 per ton. That’s the lowest in 2019. Given the widespread reports of disappointing demand, worsened by the strike at GM and ferrous scrap prices that have declined sharply over the past two months, steel prices most likely have not yet hit bottom.

That downtrend is reflected in SMU’s latest lead times and negotiations data. Shorter lead times mean the mills have fewer orders to process. Average lead times for spot orders of hot rolled have continued to inch downward to just three and a half weeks. Almost all of the steel buyers responding to SMU’s latest questionnaire report that prices are very negotiable as the mills lack much leverage in the current market conditions. SMU Steel Buyers Sentiment, to be covered in Sunday’s edition, reflects a market growing still more pessimistic.

Nearly 60 percent of steel buyers tell SMU that demand for their products and services is declining. Almost all the rest see demand remaining about the same. Just a small single-digit percentage report improving demand as of early October. As one service center executive commented: “Volumes have been off considerably over the past two months.” Added another: “The GM strike is starting to be felt throughout the supply chain.”

SMU has reached out to various processors and other sources this week to try to get a sense of how the GM strike is affecting the metals supply chain as the work stoppage nears a month in duration. Almost none have responded, which suggests the news may be bad and they don’t want to talk about it. How has the GM strike impacted your business? Help us shed some light on this situation. Please send me a note at Tim@SteelMarketUpdate.com. All those who comment will remain confidential.

SMU’s sold-out Steel 101 Workshop in Cincinnati, including a tour of the Nucor Gallatin mill, was well-received by particpants. To be sure to get a spot for the next Steel 101, register now. The workshop will be held in Ontario, Calif., Jan. 7-9, and include a tour the California Steel Industries mill. For more details and to sign up, visit: www.SteelMarketUpdate.com/Events/Steel101

As always, your business is truly appreciated by all of us here at Steel Market Update.

Tim Triplett, Executive Editor